Thursday, August 30, 2012

The 4 Questions Great Businesses Must Be Able To Answer

I'm a long-time admirer of Jason Fried, the CEO of 37Signals. He's one of the only tech CEOs who is willing to experiment on culture and organization, rather than just technology.

In this recent Fast Company interview, Jason cut to the heart of what it means to be a great business, versus what FC characterized as the "slash-and-burn" approach to startups:
"I think all you have to do is read TechCrunch. Look at what the top stories are, and they’re all about raising money, how many employees they have, and these are metrics that don’t matter. What matters is: Are you profitable? Are you building something great? Are you taking care of your people? Are you treating your customers well? In the coverage of our industry as a whole, you’ll rarely see stories about treating customers well, about people building a sustainable business."
I couldn't agree more. Great businesses don't just deliver financially--they also provide great products or services, and treat their employees and customers well. Simply focusing on financial results leaves you vulnerable to externalities.

In many ways, the poor treatment of employees and customers in high tech is no different than traditional economic externalities like pollution. It's just ironic that the same folks who trumpet their Priuses don't hesitate to drive the equivalent of a Hummer over their employees and customers.


Foobarista said...

I'd change this from "great businesses" to "any businesses", at least if the business's is a real, operating biz without a need for an "exit strategy".

Most tech startups aren't really businesses as much as they're research projects that hope to become parts of businesses, or to grow a profitable biz infrastructure around the project if they want to IPO.

Outsourcing failure and all that.

Chris said...


Sadly, even non-Internet business can live a long time despite not treating employees and customers well. Just look at Oracle. They're on year 30 and counting of treating everyone like crap.